OREANDA-NEWS. Fitch Ratings has affirmed six classes of Bank of America, N.A. - First Union National Bank Commercial Mortgage Trust's (BofA-FUNB) commercial mortgage pass-through certificates series 2001-3. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect the concentrated nature of the pool and the uncertainty of losses from the specially serviced loans despite the high credit enhancement. Fitch modeled losses of 12.1% of the remaining pool; expected losses on the original pool balance total 4.2%, including \$44.7 million (3.9% of the original pool balance) in realized losses to date. The pool is concentrated with only six loans remaining. Fitch has designated five loans (68.7%) as Fitch Loans of Concern, which includes four specially serviced assets (54.7%).

As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 97.5% to \$28.5 million from \$1.14 billion at issuance. No loans are defeased. Interest shortfalls are currently affecting classes M through Q.

The largest contributor to expected losses is related to two warehouse properties located in Hampton, VA, which is approximately 25 miles from Virginia Beach. The loans (54.7% of the pool) transferred to the special servicer in March 2014 due to maturity default. The loans had previously been with the special servicer in 2010 due to a payment default and were subsequently split into an A/B note structure. The two buildings total 516,000 square feet (sf) and were leased to the same tenant, who vacated both properties at the July 2014 lease expiration. The special servicer reports that the borrower is finalizing lease terms with a replacement tenant, which is a credit-rated ship building company. A short term maturity extension is being negotiated to enable the borrower time to refinance the loans.

The largest loan in the pool is the Sahara Town Center loan(31.3%), which is secured by a 98,344 sf retail center located in Las Vegas, NV. The loan transferred to the Special Servicer in August 2011 due to balloon payment default. The maturity date was extended to September 2022 and was returned to the Master Servicer in August 2013. Occupancy has remained stable at 84% as reported in June 2014. The debt service coverage ratio has improved to 1.84x as of June 2014 compared to 1.60x at year-end 2013.

RATING SENSITIVITIES

The Rating Outlook on class K remains Stable due to increasing credit enhancement and continued paydown. The Rating Outlooks on class L has been revised to Stable from Negative as projected losses from the specially serviced loans should be absorbed by the subordinate class N. Future upgrades to Class M are possible once the specially serviced loans have been resolved.

Fitch affirms the following classes and revises Rating Outlooks and REs as indicated:

--\$8.5 million class L at 'BBBsf'; Outlook to Stable from Negative;
--\$8.5 million class M at 'CCCsf'; RE 100%.

Fitch affirms the following classes as indicated:

--\$2.3 million class K at 'Asf'; Outlook Stable;
--\$9.1 million class N at 'Dsf'; RE 0%;
--\$0 class O at 'Dsf'; RE 0%;
--\$0 class P at 'Dsf'; RE 0%.

The class A-1, A-2, A-2F, B through J and X-P certificates have paid in full. Fitch does not rate the class Q certificates or the subordinate component class V-1, V-2, V-3, V-4 and V-5 certificates. Fitch previously withdrew the rating on the interest-only class XC certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:

Structured Finance >> CMBS >> Criteria Reports